On July 21, 2011, Express Scripts, Inc., and Medco Health Solutions, Inc., announced plans to merge.

These companies are pharmacy benefit managers (PBMs) – middlemen that negotiate and manage prescription drug coverage plans for large organizations like employers, insurance plans and the government. PBMs are responsible for determining the details of prescription drug benefits available to patients through their insurance plans. PBMs influence things like which medications are covered and how patients get their prescriptions filled (for example, mail order or neighborhood pharmacies).

Immediately, the National Association of Chain Drug Stores (NACDS) issued a joint statement with the National Community Pharmacists Association (NCPA), opposing the merger. NACDS and NCPA said the merger would create a “middle man that is too big to play fair, and will have immense power to unfairly dominate the market.”  For more information, please see the NACDS white paper that is available by clicking here.

Ultimately, by reducing competition and choice, this merger is feared to negatively affect consumers, employers, health plans, and pharmacies, among others. In fact, several national consumer groups have announced opposition to the merger.

Among the potential consequences of the merger that would be most noticeable to patients, the new mega-PBM would have more power to mandate that patients use its own mail-order pharmacy for some drugs, instead of the patient’s favorite neighborhood pharmacy. The new mega-PBM would have more power to dictate prescription drugs available to patients, based on the rebates that the PBM receives from drug manufacturers rather than on medical decisions. Further, myriad opportunities exist for reduced competition in this situation to result in higher costs – contrary to the claims of the companies that are proposing to merge. Skepticism is high that the new mega-PBM actually would pass along any supposed cost savings – if any – to consumers, health plans and employers.

On September 8, 2011, news broke regarding the Federal Trade Commission’s (FTC) issuance of a “second request” for more information about the merger, indicating that this proposed merger merits close scrutiny. This investigation is ongoing.

This website was created by NACDS to present timely insights and news regarding the proposed merger, and the emerging case for preventing the anti-competitive and anti-consumer effects of such domination in the PBM market.